The Board of Directors of Karnataka Bank, which met on January 27, has approved to raise balance ₹700 crore by way of preferential issue for an amount up to ₹100 crore and an amount aggregating up to ₹600 crore through, private placement(s), qualified institutions placement(s) and/or any combination thereof or any other method as may be permitted under applicable laws, subject to such necessary regulatory/statutory approvals as the case maybe and shareholders’ approval.

The bank informed stock exchanges that the board has approved the issuance of up to 37,72,730 equity shares of face value of ₹10 to ICICI Lombard General Insurance Company Ltd at a price of ₹265.06 per equity share (including premium of ₹255.06 per share), amounting to an aggregate of up to ₹100 crore on a preferential basis, subject to approval of shareholders of the bank and other regulatory approvals as may be required.

Giving details about the post-issue shareholding structure, the bank informed stock exchanges that ICICI Lombard General Insurance Company Ltd will hold 1.08 per cent of shares of the bank.

The board has also approved to issue, offer and allot equity shares of face value of ₹10 each fully paid-up, to permitted investors in terms of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2015, at such price as may be permitted under applicable law, amounting to an aggregate of up to ₹600 crore through private placement(s), qualified institutions placement(s) and/or any combination thereof or any other method as may be permitted under applicable laws.

Quoting Srikrishnan H, MD and CEO of Karnataka Bank, a media statement that was posted on the websites of stock exchanges, said this proposed capital infusion is a validation of the bank’s positioning for growth and stability. “We welcome ICICI Lombard General Insurance Company Ltd to our CapTable adding to the already well represented institutional holdings. We are confident about our follow-up funding round that will attract marquee investors standing by our committed performance in the future,” he said.

Sekhar Rao, Executive Director of the bank, said the bank’s journey of growth and innovation will be further accelerated by the proposed capital raise. “This will enable us to explore innovative options for growth and support our ambitions to expand our reach, embrace digital transformation, support partnerships and deliver value to all stakeholders,” he said.

NovaaOne Capital, a SEBI-registered Merchant Banker, is acting as financial advisor to the bank on fund raise through preferential issue, it said.

The board of directors of the bank on September 22, 2023 had approved to raise equity capital up to an amount of ₹1,500 crore in Indian/ permitted foreign currency, in Indian and/ or overseas markets through issue of equity shares by way of qualified institutional placement, preferential issue, rights issue, or any other permissible mode of capital issue, subject to such necessary regulatory/statutory approvals as the case maybe and shareholders’ approval.

Accordingly, the bank had raised an amount up to ₹800 crore by way of preferential issue of equity shares on October 26 2023.

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